Craniofacial growth and development depend on the activity of bone-forming cells derived from mesenchymal cells. The proteins that control this process are not well understood. Here we propose that the Foxo1 is an early molecular switch during mesenchymal cell differentiation into osteoblasts through regulation of expression of key osteogenic factors. Our preliminary data demonstrated that Foxo1 activity increases in mouse and human mesenchymal cells under the influence of osteogenic stimulants. In addition, silencing of Foxo1 blocks both the enzymatic activity and expression of alkaline phosphatase and results in decreased culture mineralization even in presence of strong osteogenic stimulants. Furthermore, expression and activity of Foxo1 increase during active bone formation in embryonic mouse tibiae, while Foxo1 silencing downregulates Runx2 expression both in vitro and ex-vivo. Two Specific Aims are proposed for this study: Specific Aim 1: To determine the target genes through which Foxo1 controls mesenchymal cell differentiation. We will determine whether the expression of selected target genes is affected by silencing Foxo1 using siRNA technology. In addition, using ChIP assay and promoter studies, we will investigate the direct interaction of Foxo1 with the promoter of these genes. Specific Aim 2: To characterize the mechanism through which Foxo1 affects skeletal development. Initially we will map Foxo1 expression in mouse embryos at several developmental stages by immunohistochemistry and in situ hybridization. Areas of active bone formation will be confirmed by co-localization with osteogenic markers. To manipulate Foxo1 activity during active bone formation, we will use an organ culture approach. The effect of downregulating Foxo1 expression/activity on bone formation will be studied by characterizing the expression of osteogenic markers, quantifying bone formation and mineralization in developing tibiae ex vivo. Relevance: Differentiation of mesenchymal cells into bone forming cells is crucial during normal skeletal growth and development. It is also of considerable interest for therapies to enhance bone repair after injury, during orthodontic tooth movement, integration of dental implants, fracture repair, and maintenance of bone mass during aging. Understanding the mechanism that regulates this process is of significant clinical value, due to the limited sources of mesenchymal cells. Since these mesenchymal cells can differentiate into bone- or fat-forming cells, controlling the balance between bone and fat formation will provide a therapeutic target to prevent or treat conditions where there is inadequate bone formation and/or excessive fat formation. Public Health Relevance: Differentiation of mesenchymal cells into bone forming cells is crucial during normal skeletal growth and development. It is also of considerable interest for therapies to enhance bone repair after injury, during orthodontic tooth movement, integration of dental implants, fracture repair, and maintenance of bone mass during aging. Understanding the mechanism that regulates this process is of significant clinical value, due to the limited sources of mesenchymal cells.